External Personnel Compliance Check

External Personnel Compliance Check

External Personnel Compliance Check

It is a typical business process for companies to hire third parties. Whenever third parties are assigned tasks that are closely related to the company’s organisation or operational processes, this is referred to as a deployment of external personnel. This entails a variety of risks.

With the reform of the German Temporary Employment Act [Arbeitnehmerüberlassungsgesetz, AÜG] in 2017, the legislator significantly tightened the legal requirements for hiring third parties. It not only focused on preventing the illegal provision of temporary workers, but also on pseudo self-employment. A multitude of court decisions, including the “crowdworker decision” of the German Federal Labour Court [Bundesarbeitsgericht, BAG] (ruling of 1 December 2020, docket No. 9 AZR 102/20) and changes to the law, such as the changes to the social security status determination procedure as of 1 April 2022, make the deployment of external personnel an ongoing challenge for companies.

In cases where temporary workers are supplied illegally or pseudo freelancers are hired, companies face considerable compliance risks. In the context of tax audits, they face the risk of severe back payments of contributions, late payment penalties and official fines of up to 500,000 euros. Company decision-makers may also be liable to prosecution. Notwithstanding this, case law also assumes that, in the case of impermissible contractual arrangements, liability claims against the third party for defective performance are excluded.

With our External Personnel Compliance Check, you can carry out a digitised check of your envisaged hiring of external personnel in just a few minutes. A traffic light system visualises the risks for you. A brief assessment is also provided for your further use.

Should you be interested in conducting a check, we would be happy to send you the password with which you can use our tool. Please get in touch with our contact person Isabel Hexel.

Isabel Hexel

Isabel Hexel

PartnerAttorneySpecialized Attorney for Employment Law

Konrad-Adenauer-Ufer 23
50668 Cologne
T +49 221 2091 348
M +49 172 1476 657

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